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What is Strategy?Building a Strategy

Costs of Poor Strategy

Execution

Successful Transitions

5 Steps Tools Summary Questions

Agenda

At the end of this presentation you will be better equipped to face the single biggest challenge facing today’s organizations:

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What is Strategy?

• There are many definitions, but at the core, strategy is: a coordinated set of actions to accomplish a goal

• Designed to leverage your core competencies to gain a competitive advantage over your industry peers

Sidney Crosby, Vancouver 2010 Dyson: Innovating mature business categories Clara Hughes: Canadian cyclist & speed skater

Canadian Tire Corporation: Evolving Sporting Goods retail leader Steve Jobs & Apple: Redefining consumer electronics (market creation)

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Lululemon: High quality Yoga clothing that makes you look great!

A strategy answers three fundamental questions.

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How will you get there?

How will you know that you have arrived?

Where do you want to go?

• Differentiation• Low Cost• Strategic Alliance• Acquisition• Innovation pipeline• Market creation

• What does success look, feel, and smell like?

• What metrics will you have achieved?

• What will be different?

• To have the most accessible retail locations

• To be the top 5 in revenues

• To deliver the best service

Strategy is created by building a data driven situational analysis.

Situational Analysis

Macro Scan (PESTe)

Market/ Industry

Assessment

Customer Research

Competitive Intelligence

Supplier Evaluation

Financial Performance

Value Chain Analysis

Strategy & Structure

Assessment

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Externally Fo

cused

Inte

rnal

ly F

ocu

sed

Information is turned into insights that inform the creation of strategy.

External Summary: Industry assessment, Opportunities & Threats, Key Success Factors (KSF)

Internal Summary: Strengths and Weaknesses, Core Competencies

Strategic Gap: What capabilities can we leverage to deliver on the KSFs and fill our internal gaps?

Developing Strategic Options: Differentiation vs. Cost strategy, ROI of options, option selection

Strategic Plan: Vision, Strategic Priorities, Tactics, Objectives, Project Plan & Resources, Risks and Mitigation, Success Measures

Situational Analysis

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My strategy is complete, now what?

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The organizational costs of poor execution are too important to ignore!

Why is execution so difficult?• Strategic change is often behavioural • Behavioral change requires people to do

things differently• However, people are most often not the

reason for poor execution– The real enemy of execution is your day job!

(AKA: The Whirlwind)

Source: The 4 Disciplines of Execution, McChesney, Covey, Huling

Wasted ResourcesUnclear Goals

Politics

Shifting Priorities

Frustration

Lack of Company Focus

No Accountability

Poor Productivity

Low commitment to Objectives

Little Faith in Leadership

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“To achieve a goal you have never achieved before, you must start doing things you have never done before.” – Stephen R. Covey

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So how do we improve our chances of successful execution?

Get teams to act on Lead measures in

order to achieve goals

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Source: The 4 Disciplines of Execution, McChesney, Covey, Huling and Personal Experience

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• To build a strategy designed for execution:– Solicit feedback from those who will be doing

the work and let them be part of the strategy design process. It will build buy-in and commitment to it.

– Create an aspirational vision statement that articulates what the look and feel will be once you have arrived at this new destination

– Articulate specific points of differentiation –What will be different from the current state? Paint that picture: what will it look like, smell like, feel like for your customers and your employees?

– Create detailed plans on how you will deliver on the points of differentiation

– Include financial goals by year. If there are no goals (Rev, Expense, Risk, Customer) how do you know if you are successful?

1 - Redesign the strategy development process: keep it simple!

We will a destination for X, Y & Z; based on A, B, & C in order to

encourage sports participation and build customer connections in

communities.

Key

Init

iati

ves

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$365

$7 $9$12

$15

$250

$300

$350

$400

$450

2011 2012 2013 2014 2015 2016

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• The more you try to do, the less you will accomplish: stick to 1-3 goals

• Include SMART (Specific, Measurable, Achievable, Realistic, Time Sensitive) objectives where possible. It will enable greater understanding and commitment.

• Lower level objectives should ‘ladder’ up to the highest level objectives and be tied to a benefit (financial, brand building, customer loyalty, etc)

2 - Clearly define, then focus on a small set of very important goals

Be the market share leader

Grow top line sales by 3% ($3 million) in the ABC Division

Create promotional events in the March to October timeframe to drive $2 million in incremental sales at last year’s profit margin rates.

Build a themed promotional event for Fire Safety month (October) that will earn $X.

Meet with smoke detector vendors in

May/June to get special products and

costing to support Fire Safety month.

Work with Flyer creative to promote

the event.

Request Digital and Media teams to create a campaign to support

Fire Safety Month.

Outcome B

Complete for each business unit!

Focus on small set (1-3)of very important goals down to the month or weekly level

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3 - Get teams to act on Lead measures in order to achieve goals

• Lead measures are more important than Lag measures! Why?

– Lag measures have happened in the past and are easier to report on

– Lead measures are virtually in your control and will help you to accomplish your goal: you act on these to influence your Lag measures

Strategic Objective Lead Measure Lag Measure

Increase customer satisfaction Improve account management Customer Satisfaction Score

Create innovative products Change product development New product/service revenue

Broaden revenue portfolio Add 3 more products this year Revenue growth

Examples:

How? What are some actions you can take to influence this Lead measure?

• Increased calls and scheduled site visits

• Learn more about your customer(s) and add value first

• Ask users of your products about how products could be improved. Then, work on improving the product to meet this need.

13Source: The 4 Disciplines of Execution, McChesney, Covey, Huling

4 - Create and monitor a clearly defined scoreboard

• A scoreboard helps you AND your team see how you are doing against your small set of important goals by using your lag and lead measures

• There are four guiding principles when it comes to keeping score:

•Easy to understand metrics•Use visuals (colors, symbols) that resonate

Simplicity

•Engaging your team to draw players in•Make it FUN

Engagement

•Review regularly (weekly) with all team members•Post scoreboard in public

Routine

•Celebrate success •Support the resolution of challenges

Celebrate

Status: Line of Business Initiatives

3%19%

55%

6%17%

Red: Will notbe acheivedas planned

Yellow: Atrisk of beingcompleted

Green: On-track

Complete Not Started

Breakdown of Initiatives by Status:

61%

On-Track & Complete Initiatives

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Focus on small set of goals

Act on lead measures to achieve goals

Use a scoreboard to view progress

Regular and frequent

reviews with team

Team members set own

commitments in front of

peers

Deliver results/address challenges and

celebrate success

5 - Integrate an accountability routine: a virtuous cycle of success!

An accountability routine creates

an execution culture!

Reinforces accountability and

encourages performance!

15Source: The 4 Disciplines of Execution, McChesney, Covey, Huling and Personal Experience

Template Sample – Defining and focusing on a small set of goals

• Through this iterative process, you can easily define a core set of actions and tasks that can be managed on a weekly or monthly basis

• Notice that these are all lead measures• This process takes time, you must make important trade-offs and prioritize

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Goals Outcomes Strategies Actions Tasks

Be the Market Share

Leader

Goal 2

Goal 3

Increase revenue by

3%

Outcome 2

Create promotional events btwn. June and Oct

Action 2

Fire Safety Event (Oct)

Meet w/Vendors

Flyer Theme

Digital & Media

Introduce new brand to grow

sales

Strategy 3

Summary

• Strategy development is ‘sexy’ and what most leaders think they need to focus on. However, strategy must be fine tuned for execution!

• Execution is strategy’s unattractive cousin and gets low priority from people if it is not carefully threaded into day to day operations

• Supporting a Strategy through its Execution IS A LEADER’s Job!

• The following best practices will help you: 1. Redesign your strategy development process

2. Clearly define and then focus on a small set of very important goals

3. Get teams to act on Lead measures in order to achieve goals

4. Create and monitor a clearly defined scoreboard

5. Integrate an accountability routine

• Integrating these proven techniques will greatly improve your chances to successfully execute your important strategies!

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QUESTIONS?

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THANK YOU!

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